A recent announcement by the Children’s Mutual has stated that the friendly society is planning to move all of it’s savings into it’s Canadian owned rival Forester Life.

This will result in almost 1 million Child Trust Fund holders having their funds transferred across to the rival society without having a say on the matter.

It has been rumoured that the Children’s Mutual have been looking for a buyer for quite some time now. It is believed that the cost of running their CTF accounts is unmanageable and the scrapping of the child trust fund by the government compounded their misery as this was their main source of new business.

Formerly known as ‘Tunbridge Wells Equitable Friendly Society’, The Children’s Mutual Society has said to have ‘entered into exclusive negotiations’ with it’s rival Forester Life.

Currently, more than 927,000 customers hold a child trust fund with the society, a majority of them by taking advantage of the government vouchers but there are fears that CTF accounts will perform poorly from now on due to investment providers concentrating on the new Junior ISA Accounts which where launched back in November 2011.

Many people now believe that customers should be able to transfer their Child Trust Fund to a Junior ISA and take advantage of the larger investment options potentially open to them and this news will only strengthen the call of many people and organisations.

However, Forester Life have announced that the takeover should be beneficial for it’s new members as they hope to drive down the cost of managing the funds by economies of scale and it is also worth noting that the money already set aside my the Children’s Mutual for managing the funds would be released to help boost the final or terminal bonus of the Child Trust Fund.

How ever you look at it, surely the coalition government must look more closely at the possibility of allowing CTF holders to transfer child trust fund to a Children’s ISA?